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House committee hears bill to cut income tax rates and raise deductions
Summary
Representative Brandon Leer told the House Taxation Committee HB 337 would lower income tax brackets and expand standard deductions; opponents warned analyses show the bulk of benefits would flow to the wealthiest and that the measure could shave hundreds of millions from state revenue.
Representative Brandon Leer, sponsor of House Bill 337, told the House Taxation Committee the measure would lower both income tax brackets and expand deduction thresholds, saying the changes would provide an income-tax cut for every resident of Montana.
"We are going to try to lower both brackets of the income tax," Leer said, outlining a phased reduction in the top bracket and higher deductions. He told the committee the bill would lower the top bracket about a half point over two fiscal years, raise the individual deduction from $22,000 to $70,000 (to $40,000 for married couples) and, when fully implemented in 2027, would set bottom-bracket thresholds at $100,000 for singles and $200,000 for married filers.
The proposal drew several opponents who urged the committee to reject the bill. Rose Bender of the Montana Budget and Policy Center testified the bill would concentrate benefits among higher-income residents, citing an analysis from the Institute on Taxation and Economic Policy that "73% of the tax cuts in House Bill 337 will go to the richest 20% of Montanans." Bender testified the plan would cost "more than $200,000,000 each year," and warned of long-term reductions to the state tax base that could hamper investments in public services.
Amanda Curtis, president of the Montana Federation of Public Employees, said the union opposes the bill because it would create "an unsustainable tax system" that would put education, health care and law enforcement services at risk. Sydney Berry of the Montana Coalition Against Domestic and [redacted] Violence testified online that cuts at this scale would harm advocacy and criminal justice programs that rely on state funding.
Jake Ford, a bureau chief at the Department of Revenue, said he had not seen a fiscal analysis; Leer told the committee he had reviewed the fiscal note and estimated the fully implemented impact would be roughly $300,000,000 over the biennium and said members would receive the fiscal note by the next meeting.
Committee members asked about the bill's structural impact in weaker economic years; Leer said past rate reductions had not produced a structural break and said the governor's fiscal team felt comfortable with projected impacts after review.
The committee took no executive action on HB 337 at this hearing. Chair Fielder closed the HB 337 hearing after sponsors, opponents and informational witnesses concluded their remarks.
